Microsoft is preparing for another significant round of layoffs, reportedly targeting its Xbox division as part of a wider company restructuring set to take place before the end of its fiscal year on June 30. If confirmed, this will be the fourth major round of job cuts at the tech giant in just 18 months. The move reflects Microsoft’s sharpened focus on profitability and cost-efficiency following its massive $69 billion acquisition of gaming giant Activision Blizzard last year.
Xbox Division Faces More Cuts
According to sources cited by Bloomberg, several teams within the Xbox business—responsible for gaming consoles, in-house game development studios, and digital services like Game Pass—will be affected by the upcoming layoffs. The total number of roles to be cut has not yet been disclosed, but insiders describe the scale as “substantial.”
The Xbox unit has already experienced multiple staffing changes over the past year, including the shutdown of some subsidiary studios in 2023. With the integration of Activision Blizzard now underway, Microsoft is reportedly reassessing the structure and financial strategy of its gaming division to streamline operations and reduce redundancies.
These cuts are expected to align with Microsoft’s end-of-year reorganisation cycle, a time when the company historically makes significant internal adjustments across departments to align with new strategic priorities.
Wider Restructuring Beyond Gaming
This upcoming round of layoffs is not limited to the gaming business. Earlier reports had already hinted at broader workforce reductions across departments such as sales and operations. In May 2024, Microsoft laid off roughly 6,000 employees, primarily from engineering and product development roles. While that round spared sales and marketing positions, insiders suggest that these customer-facing departments could be affected this time around.
Microsoft currently employs approximately 228,000 people globally, with around 45,000 working in sales and marketing. The potential scale of this layoff, coupled with the inclusion of multiple teams, marks it as one of the most significant workforce shifts in recent Microsoft history.
One of the major reasons behind the restructuring is Microsoft’s long-term commitment to artificial intelligence and cloud computing. The company has made large-scale investments in building AI infrastructure and data centres, necessitating cost-cutting measures in other areas to maintain financial balance.
In line with this shift, Microsoft has started outsourcing some functions. In April 2024, for example, the company announced that software sales for small and mid-sized businesses would be handled by third-party vendors, reducing the load on its internal teams and cutting operational costs.
Although Microsoft has not officially confirmed the new round of layoffs, it has maintained in recent statements that the company routinely reviews its workforce and adjusts team structures in line with evolving business goals. Executives have also repeatedly emphasised the importance of controlling discretionary spending and maximising efficiency as Microsoft expands its focus on emerging technologies.
The upcoming restructuring will be closely watched across the tech industry, especially by those in gaming and enterprise sales, as it may reflect a broader trend of strategic repositioning among large technology companies balancing innovation with financial discipline.
